The EU Pay Transparency Directive will introduce new obligations for employers. Stock image
As few as 6pc of Irish businesses are prepared for a June deadline for “pay transparency” rules set to significantly shake up recruitment and staff management, according to analysis from Mercer, which advises businesses on staffing and employment issues.
The EU Pay Transparency Directive must be transposed into Irish law by June 7 this year and will create significant new obligations on employers, including having to advertise the pay or pay band for new roles and having to provide existing workers with information about their own pay relative to others with equivalent levels of responsibility.
Employees will have the right to receive information about not just their own pay but average pay by gender for categories of employees performing the same or work of equal value.
Larger employers will also have to share information about the criteria used to determine pay rates.
Similar moves for greater transparency about pay are under way in jurisdictions beyond the EU.
The Nordic region, the US and Canada are relatively more advanced in terms of preparing for full implementation
Mercer says its 2026 Global Pay Transparency Survey is the world’s largest comprehensive study of pay transparency practices across industries and regions and was conducted late last year.
It found businesses in Ireland are among the least prepared, globally, for the impending new rules. It found about 77pc of organisations globally are developing or have adopted a pay-transparency strategy, but only a small share have fully implemented it – 9pc in continental Europe and around 6pc in the Nordics, Ireland and the in UK.
The Nordic region, the US and Canada are relatively more advanced in terms of preparing for full implementation, while the UK, Ireland and continental Europe lag.
Mercer says that is leaving organisations exposed to penalties, litigation and talent loss when the directive is enforced.
Job candidates, meanwhile, already have increasingly high expectations when it comes to transparency about pay for advertised jobs, the Mercer survey found.
While Mercer argues there is a reputational and operational advantage to embracing the shift to pay transparency, the survey found legal compliance is the key driver for businesses, with nearly 90pc of organisations in the US and Canada, Europe and the UK citing it as a key motivator.
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